A secured loan is one in which the borrower puts up a personal asset as collateral, based on which the value of the loan is determined. In most cases, the collateral is the same item for which the loan is being borrowed, which in the case of an auto loan is the car. This means that the lender can repossess the vehicle if the borrower fails to make the agreed-upon payments.

In some cases, the lender might also ask for additional security on top of vehicle for which the loan is being taken. This could be in the form of the borrower’s home, boat, or other property, which the lender holds against the loan. The legal document possessed by the lender in case of a secured loan is known as a lien, which the lender releases upon repayment of the loan. In case the borrower fails to repay the loan, the borrower can legally exercise the lien to take possession of the collateral.

The requirements for getting a secured auto loan in Texas are:

• Verifiable income: The primary requirement by most lenders for secured auto loans is a verifiable source of income. This could be in the form of paycheck stubs from several previous pay periods, bank statements showing regular monthly deposits from a certain source, or federal tax returns in case you are self-employed.
• Residency: The lender will usually want to know that you have been occupying your current residence for a sufficient period of time- usually 12 months. If you have recently moved into your present home, you might need to show that you have resided at a single address for a period of at least 12 months in the past ten years.
• Steady employment: The lender wants to ensure that you shall be able to make payments against your loan regularly, which usually comes with steady employment. You should be able to prove that you have been steadily employed for the past 12 months or more. Self-employed individuals or those with alternate sources of income need to prove that they have a steady source of income.

If you fulfill all the above requirements, you should be eligible to get a secured auto loan in Killeen, TX. Be sure to shop around and compare interest rates, penalties, and benefits offered by different lenders, before settling for a secured auto loan.

The first step of getting an approval for your loan is to carry out a research of the auto finance options being offered by different companies. You don’t just need to consider the basic facts like the interest rate and repayment period, but should also have a look at the other terms and conditions of the loan.

It is advisable to discuss the loan directly with the finance company, instead of going through an auto dealer, since the latter is likely to direct you to a financier who offers him a lucrative deal.

When you apply for the loan, you shall need to provide verifiable claims for all the sources of income that you have stated. Previous tax forms can come in handy at this stage. You should also collect any pay stubs and proof of utilities or a lease in your name.

You shall also need to provide a proof of your residence, which shall be verified by the finance company. Your landline phone bill or even a cell phone bill address should suffice for this. You might also need to provide an additional residence proof, like business correspondence to your residential address.

As a proof of your current monthly income and job stability, you need to provide your employer’s name, as well as the phone number of a reference who can verify the post that you are working at, your joining date at the company, and the salary that you are drawing.

If you are self-employed, it might be slightly trickier to verify your income. It is helpful to have tax returns for the past two years to present to the financing company.

In case you need more income to qualify for the loan, you can consider getting a cosigner for the loan.

You must ensure that all the information that you provide is accurate and verifiable. Providing inaccurate information can make you face legal problems. Any source of income that cannot be verified on paper is of no use while applying for a car loan, since the company will need to verify all the information that you provide.

It is not a good idea to apply at multiple companies for a car loan, since each application that is processed results in 2 points being deducted from your credit score. Do your research before applying for a loan, and once you do, do not switch loyalties.

To For more tips or to avail cheap auto loans in Central Texas, visit us at Greater Central Texas Federal Credit Union.  We are situated at 3305 E Elms Road, Killeen, TX 76542. You can also call us at 254-690-2274.

Secured Auto Loan - 72 Month Auto Financing